Swiss-based Pictet Wealth Management shared its insights on the investment outlook for 2026 at a London media event yesterday, highlighting the main investment themes to watch in 2026 as well as forecasts for economies and asset classes.
At a media event in London yesterday, Géraldine Sundstrom,
managing director and head of investment offering at Pictet Wealth
Management, said her preference was for equities
over fixed income in 2026. Although US equities remain a
cornerstone of investors portfolios, Sundstrom favours a
reduction in investors allocation to US equities, and an increase
in European and emerging market ones.
Sundstrom spoke at a time when geopolitical worries, including
concerns about a weakening dollar and trade frictions, have
weighed on minds and sent inflows into the safe-haven asset of
gold. This week, the metal came close to the $5,300 per ounce
level. Sundstrom is reasonably optimistic on the US
economy, but mindful of certain risks.
“Artificial intelligence is a gift and a curse for the US
economy,” Sundstrom said at the event. “The US economy runs on AI
and could still go into a recession, a risk that we are
watching.” But she remains quite positive on US equities in 2026.
She thinks the peak of trade uncertainty has now passed, there is
supportive monetary policy and broad-based fiscal stimulus.
“Economies are more stable in 2026,” she continued. She expects
US GDP growth to reach 1.9 per cent in 2026, 1.3 per cent in
Europe, 0.8 per cent in Switzerland, 1.2 per cent in the UK, 4.7
per cent, in China and 0.9 per cent in Japan.
“Interest in emerging market equities is increasing, offering
elevated real returns. Valuations are relatively cheap and the
weak dollar is benefiting them,” she added.
“Chinese tech also comes at a significant discount to US tech and
our interest is increasing there. Chinese tech offers more
investment opportunities. We are also looking at India after a
disappointing year last year, as the growth story is still
attractive,” Rupert Howard, senior investment specialist at
Pictet Wealth Management, said. “We are positive on emerging
market equities and fixed income.”
Sundstrom is also more positive on Europe in 2026 after the
recent hikes in defence spending and infrastructure. She believes
that European markets could outperform in 2026, on the back of
low expectations.
Nevertheless, Sundstrom said that US equities dominate the
market while investment in Europe remains very small. “The US has
been a beacon of stability and exceptionalism for many years,”
she continued. “But when the US is no longer the ally it used to
be, investors attitudes change,” she said. She recommends
that investors reduce their allocation to US equities, and
increase it for European and emerging market equities.
Sundstrom is not as positive on fixed income in 2026, with many
countries like the US and Europe running high deficits. “The
60:40 rule on equities and bonds and the relative safety of fixed
income is no longer there,” she continued.
Although a number of
wealth managers are positive on UK gilts and equities in
2026, Sundstrom is less constructive on the UK. “We are not as
constructive on the UK economy as others. There are still
headwinds, weak wage growth in the private sector, with employers
increased national insurance contributions raising headwinds for
employment,” Howard said. Although gilt yields are very
high and it does tick a lot of boxes, there is a lot of
volatility, Sundstrom added.
Like a number of firms, Sundstrom sees opportunities in private
markets, after a number of dry years, real estate as well as
precious metals, notably gold, which has seen record highs. She
believes that gold could still go up even more. She also feels
that real estate is undervalued, and is positive on Swiss
and Singaporean real estate in particular.
“We are prominent on real estate, infrastructure and have a lot
of clients with exposure to this area. There is also increasing
interest around hedge funds,” Howard said. Sundstrom also sees
opportunities in neglected sectors such as healthcare in 2026.
What the others say
Pictet”s views are not unique. Dominic Tayler, UK managing
director at Oakglen Wealth, for
instance, is underweight in US equities and overweight in Europe.
The firm also recently added Asian tech multinationals
Tencent, Samsung and Alibaba to their portfolios.
Lombard Odier
also believes that emerging markets look well positioned in 2026
in a world of more intense competition for resources and
technology, supported by accommodative fiscal and monetary
policies. That bank also thinks that the appeal of precious
metals, led by gold, is increasing as geopolitical
fragmentation deepens and central banks diversify their reserves.
Limited mining capacity is underpinning their expectation of
higher gold prices, and supports the banks’ preference for the
materials sector within equities.
Meanwhile, California-based investment manager Franklin
Templeton sees a range of attractive opportunities across
private markets in 2026, despite geopolitical risks remaining
elevated, and markets continuing to digest the impact of trade
tariffs. See more
here,
here,
here and
here.